After months of debate, Europe on Wednesday unveiled its plans to create a digital single market, uniting industries and consumers online across all 28 EU countries.
The proposals, presented on Wednesday, will have a wide-ranging impact across the media and entertainment industry, from the film and television sectors to telecoms and mobile carriers to online providers of goods and services.
According to the EU's own figures, only 15 percent of EU citizens shop online in another EU country, and only 7 percent of small and medium sized companies in Europe sell their goods and services cross-border.
The stated goal of the "digital single market strategy" is to knock down national barriers between European countries by updating copyright laws, harmonizing regulation and scrapping barriers to online trade such as geo-blocking, the process by which businesses in one country restrict access to websites or content based in another.
Critics of the proposals say Europe is looking to create its own pan-national digital fortress, enacting laws that restrict or punish big tech companies, such as Google, Amazon and Facebook, to help Europe's fledging Internet industry compete.
"It appears (the proposals) would create a single market for Europe at the expense of the global digital economy," said Robert Atkinson, president of Washington-based think tank the Information Technology and Innovation Foundation. "The digital single market should be a pathway towards integrating Europe into the global Internet economy, not a strategy for isolating Europe from the rest of the world. In particular, the EU should avoid developing European-only, government-led technology standards."
Indeed, on May 6, the European commission also launched an anti-trust inquiry into the e-commerce sector to identify potential competition concerns affecting European e-commerce markets. Since U.S. tech firms dominate the online market in Europe, the inquiry will be largely targetting their business operations.
For Europe's film and TV industry, one major fear is that digital barriers and changing EU copyright law could open the door to widespread online piracy in the region.
However, Andrus Ansip, the European Commission's vice president in charge of the digital single market, has assuaged the fears of EU producers by pledging that a borderless Europe would not mean an end to territorial licensing - selling the rights to a film in various territories on an exclusive basis — or windowing, the system whereby a movie is released in stages on different platforms, from cinemas, to VOD to television.
"We do not want to change the system or principle of territoriality," Ansip sad. "We are in favor of the principle of territoriality, but I am not accepting absolute territorial exclusivity."
Ansip argued that the current system is a lose-lose for content owners and consumers. "I would like to enjoy (film) masterpieces created by creators but they are not accepting my money (at the moment)," Ansip said, "We want to make it a win-win" by allowing consumers from across the EU to buy films and other creative works sold anywhere in Europe.
Part of that, according to the proposals unveiled Wednesday, will include a harmonisation of copyright laws across the EU.
"The aim is to improve people's access to cultural content online -- thereby nurturing cultural diversity -- while opening new opportunities for creators and the content industry. In particular, the Commission wants to ensure that users who buy films, music or articles at home can also enjoy them while travelling across Europe," the proposal reads. "The Commission will also look at the role of online intermediaries in relation to copyright-protected work. It will step up enforcement against commercial-scale infringements of intellectual property rights."
The proposals for the digital single market will be on the agenda of the European Council meeting on June 25-26. A final draft of proposals will then goe to individual European parliaments to be debated and potentially amended. The European parliament will then vote on a final draft.
But Reed Hastings, CEO of Netflix, one of the companies that could stand to gain the most from a single digital market in Europe, said he wasn't waiting for politicans to sort out the details. Speaking to the Media Conventions conference in Berlin Tuesday night, Hastings said Netflix was looking "to solve the problem (of cross-border demand) commercially" by making the bulk of all Netflix content available to all its subscribers worldwide at the same time.
This article was first published by The Hollywood Reporter.